SOMERSWORTH — “We knew from the day the thefts were initially discovered that this report would be forthcoming,” said Beth Salinger, executive director of the Somersworth Housing Authority. “We encouraged the firm to go through anything and everything. Apart from the theft, there were no other issues whatsoever.”

On Tuesday, Salinger reflected on a recent auditor's report that concluding a number of internal controls were missing within the Authority over a six-year span — a period when more than $700,000 was stolen by the organization's former fiscal director, Lisa Reid.

On Dec. 6, 2011, Reid reportedly admitted to Salinger she stole the funds amid personal financial troubles. Somersworth police approached Reid later that same day, but she requested a lawyer, effectively shutting down communication with law enforcement. She was found dead the next morning from an apparent suicide by drug overdose.

The auditor's report — completed by the firm Hurley, O'Neill & Company of Quincy, Mass. — ultimately cites a lack of internal controls that could have prevented the loss of approximately $780,000 at the hands of the SHA's former fiscal director.

“We've implemented policies to correct those issues,” Salinger said. “A new internal control system began back in February of this year.” Some of these new improvements include a new check signing and transfer policy, along with redesigned job descriptions — all areas Reid originally exploited during her time as fiscal director.

The auditor's report states Reid processed checks written to herself on the check stock of certain checking accounts of the authority. It also says Reid endorsed the checks by scanning signatures from other legitimate checks and then printing them on the checks generated from her personal computer.

Additionally, Reid recorded the transactions in the general ledger by netting her thefts against proceeds from third parties for management fees earned by the Authority. For example, if the SHA earned $20,000 in a month for management fees and Reid stole $8,000, she would subsequently record management fee revenue of $12,000.

“The employee relied on the failures of management and the Board of Commissioners to implement effective controls,” the report reads. “Proper segregation of duties in various controls activities would have reduced or eliminated the opportunity to commit fraud and basic monitoring procedures would have detected it.”

And per the report's request, redesigning job descriptions is another point of emphasis the Authority has improved upon, Salinger said. The report concluded by asking the SHA's management to assess the critical components of internal control and ultimately implement a more effective internal control policy.

“Segregation of duties should be analyzed to ensure that the basic functions of control are separated, with those functions generally being; authorization, recording, custody of assets, and reconciliation or audit,” it reads.

Salinger said the report also shows the SHA has nothing to hide in the matter — a reason why the Board of Director's decided to make the report public.

“We put the audit out to show there's nothing to hide,” she said. “No one else had anything to do with this at all,” she said in relation to the thefts.

Commissioner Robert Crichton of the SHA Board of Commissioners mirrored Salinger's remarks. “We wanted to show that there's nothing to hide,” he said Monday. “We're continuing to move forward and are still discussing the matter.”

Although the auditor's report outlines the theft of $780,000 from the SHA, an overall total of $920,000 was actually stolen by Reid. The remaining funds, Salinger said, were stolen from the Somersworth Community Development Corporation account — an organization separate from the SHA that couldn't be included in the auditor's report.

Seeking to recoup its losses, SHA filed suit in January against Reid's husband, Scott Reid, who now controls his late wife's assets. SHA is asking a superior court judge to put a temporary freeze on those assets, which include property, vehicles, and income from the couple's furniture store in Rochester.

Emails furnished by Reid's husband during the court battle have tipped investigators off to the existence of at least two online trading accounts Lisa Reid operated before her death, according to court documents.

Salinger said the housing authority is anticipating that it may need a court order to determine if the accounts are still active, and whether they contain funds. Scott Reid has indicated he will cooperate with the housing authority in the investigation, according to court documents.

Scott Reid and his attorney were scheduled to appear in court on Sept. 20 for a hearing regarding the fate of Reid's assets. The hearing was continued until Jan. 4, 2013, at the request of the housing authority, which cited the discovery of the online trading accounts as the cause. SHA will seek to lump together any money in the accounts with Lisa Reid's other assets.

Earlier this year, a superior court judge denied a request by the housing authority to grant a temporary restraining order against Lisa Reid's assets without holding a hearing on the matter. The order would keep Scott Reid from selling or giving away any of his late wife's assets.

In March, the housing authority and Scott Reid came to an agreement to put off further legal action for 90 days. The agreement was meant to allow attorneys to determine the ownership of all assets once owned by Lisa Reid.

In the interim, Scott Reid voluntarily agreed to provide at least 10 days notice to an attorney representing the housing authority before transferring any asset of his late wife's worth more than $1,000. He also agreed to place all income from the couple's furniture store, Cozy Home Primitives, into a trust fund.

The housing authority, through its attorney, contends several assets now under Scott Reid's control were potentially purchased with funds stolen from the SHA. Those assets include time shares and/or condominiums in Florida, a Jeep, a recreational vehicle and the money used to lease space for the couple's furniture store.